March 8, 2024

What Makes LLM Chatbots Industry Game Changers

Explore the vibrant industry of language model chatbots, their best examples, their latest statistics, and features that make them true game-changers in many industries. Our guide covers all the information businesses wanted about LLM chatbots but have yet to ask.

Written by
Yuriy Pulyaev
CTO

Chatbots have been a part of the business world for many years, helping enterprises handle customer support requests and providing product and order status information. In 2022, these solutions experienced a boom in popularity and applications with the introduction of OpenAI’s ChatGPT platform, launching them into a new state of computational capability.

The drastic shift to advanced language model chatbots capable of human-like conversations was made possible thanks to a software component called large language models. It allows solutions to perform a wide range of tasks with minimum involvement of software engineers. Our article explores the ins and outs of LLM-based chatbots, their best examples, the latest usage statistics, and forecasts about the future of this technology.

Table Of Contents:

What Are Large Language Model Chatbots

These conversational software products utilize the versatility of LLMs to produce fast, accurate, and personal responses to user requests on various subjects. The language models themselves are a subset of a field called natural language processing. This technology allows software applications to understand human input and generate and translate text.

In modern chatbots, LLMs perform different operations with textual information. For example, a conversational solution can retrieve information about goods and services or evaluate customer attitudes through sentiment analysis. AI engineers train LLMs the chatbot will later use to perform specific tasks through data fine-tuning.

Modern chatbot language models offer continuous self-improvement to all conversational tools. The more interactions they have on a particular topic, the more accurate their understanding and responses become. This versatility makes LLM-enhanced chatbots indispensable in various industries, including healthcare and education.

What Caused The Popularity Of Language Model Chatbots

While chatbots harnessing the power of LLM are a relatively new phenomenon, the technology behind them has been around for decades. It’s believed that the first model dates back to the 1960s and the research of MIT professor Joseph Weizenbaum. LLMs, as most people know them, appeared in the early 2010s with the introduction of Google Brain.

However, the popularity boom of these models started in 2022 with OpenAI’s ChatGPT. This large language model demonstrated the latest advancements in text processing and generation, sparking heated debate over the use of this technology. Despite some drawbacks, businesses saw the merit in LLMs and started working on their own solutions. 

The boom in products based on chatbot language models can be attributed mainly to the benefits of ChatGPT and its counterparts. Here are the primary reasons behind the increasing adoption rates among enterprises:

  • Around-the-clock service. Businesses invest in these products to answer questions and provide information outside regular hours. This approach increases customer loyalty, drives sales, and establishes companies as reliable and helpful.
  • Cost efficiency. Using LLM-based chatbots lets businesses save up to 30% on customer support expenses. These products handle tasks that previously required the work of live agents and experts, significantly reducing their staff.
  • Deep customer insights. With modern chatbots, businesses get streamlined access to client preferences and buying habits. This information can improve marketing strategies, customer experience, and product development.
  • Content localization. Advanced chatbots can accommodate customers worldwide, as most come with multilingual capabilities. This provides an affordable and effective way to expand and maintain a global client base.

Key Differences Between Rules-Based and LLM-Based Chatbots

On the surface, modern chatbots can be hard to distinguish from their predecessors. They share the same interfaces with text input and output windows. However, their inner structure makes LLM-enhanced solutions stand out from their rule-based counterparts. We’ve prepared this table to make the differences between these products more apparent.

The Latest Statistics On LLM Chatbot Use

Last year, companies from various industries demonstrated great interest in chatbots that use modern large language models. While there’s little information about which LLMs they prefer, current chatbot market statistics show immense interest in these products.

  • According to Cognizant, by 2025, the conversational AI market will reach $1,3 billion with a 24% CAGR.
  • Juniper Research experts project the value of e-commerce transactions made with chatbots will hit $112 billion by the end of 2024.
  • According to Invespcro.com, advanced chatbots help enterprises reduce customer service spending by 50%.
  • A study conducted by Gartner shows that chatbots will become the primary customer service channel for 1/4th of enterprises by 2027.
  • By the end of 2024, 75-90% of requests will be handled by chatbots, as reported by CNBC.

Real Examples Of Large Language Model Chatbots

Companies like Meta, OpenAI, AI21 Studios, and Claude aren’t the only ones experimenting with LLMs. Several businesses already use chatbots to achieve great results. Here are their products and what they’re capable of.

  1. Amazon Chatbot

Amazon uses an LLM-based chatbot on its website to enhance customer service. With its help, customers get information on products and services, receive assistance with common questions, and check order statuses. This approach results in higher customer satisfaction levels.

  1. Bank Of America’s Erika

With Erika's help, Bank Of America’s clients receive financial assistance and advice. The chatbot lets customers manage their finances, find nearby ATMs, check their FICO score, and make payments. Erika also offers personal advice on saving funds and investing, resulting in more sound spending and better financial health.

  1. Delta Air Lines Chatbot

The American airline uses its LLM-powered assistant to make the flying experience more pleasant for its passengers. Delta Air Lines's solution lets individuals book trips, check-in, and ask travel-related questions. These features lead to efficient customer interactions and better satisfaction among the airline’s customers.

  1. IBM’s Watson Assistant 

IBM developed the chatbot as a personal financial assistant for bank and financial institution clients. The tool helps with all sorts of money-related requests, such as aid during the tax season. With its help, employees and customers quickly access information on the latest programs and rates, improving the experience for both parties.

  1. Sephora

This fashion brand has developed an LLM-enhanced chatbot that provides tailored recommendations based on client preferences and purchase history. Sephora’s assistant also uses facial recognition tech to offer cosmetics based on individual complexion and face structure. This combination results in higher customer satisfaction and a better shopping experience.

The Future Of LLM-Based Chatbots

In 2024 and beyond, the field of chatbots using large language models will be influenced by several significant trends. They represent the generational shifts and technological changes that slowly venture beyond classical text-to-text solutions. Businesses should be aware of several trends to reap the full benefits of chatbot integration.

  • Growing Influence of Gen Z

Members of Generation Z have the highest chatbot use rates among all age categories. Around 20% of shoppers from this group initiate the customer experience by using LLM-enhanced chatbots instead of talking to human agents. Only 4% of baby boomers behave this way, showing a greater rift in the use of technology between these generations. 

Companies investing in language model chatbots can drastically improve sales and customer base size through personalization and high engagement rates, which Gen Z shoppers crave, and these solutions can quickly provide.

  • Advancements In NLP

NLP experts constantly improve large language models responsible for the many operations chatbots can perform. These developments will help address the current limitations of LLM-enhanced solutions and make interacting with them almost indistinguishable from talking to real people.

As this field of artificial intelligence improves, businesses will be more inclined to give chatbots a chance. It all depends on how fast AI engineers solve hallucinations, inaccuracies, and security issues associated with these conversational tools. Companies involved with chatbot language model development are doing their best, but their products still need adjustment due to the complexities of this technology.

  • Mainstream Use Of Voice Bots

From this year on, regular text-based products will be slowly but surely replaced or enhanced with voice technology. Even now, 50% of all search activity is conducted with speech, showing people’s interest in more personal and interactive experiences. There are several reasons why such products will become more mainstream.

First, voice bots will allow companies to provide instant and reliable information. Second, these products will lead to more engaging and dynamic conversations. Lastly, voice bots have the potential to respond to clients based on their gender, race, and native language, unlocking new personalization opportunities.

  • Messengers As A Growth Factor

Businesses worldwide use chatbots to offer personal interactions via messaging apps such as Telegram, Facebook Messenger, WhatsUp, and others. Integrating LLM-enhanced chatbots into these conversation channels will help them foster brand recognition, online shopping promotion, and customer service improvement.

This integration will have a tangible impact on enterprises. 47% of online shoppers are ready to purchase items through chatbots. Most buyers believe these tools provide the most comfortable way of interacting with businesses. Companies will continue to adopt these products for more streamlined lead generation and sales automation.

Conclusion

Despite their perceived simplicity, LLM chatbots remain one of the driving forces behind the modern economy. Real-life examples of these products show their practical application beyond text generation or making AI-generated images. If you wish to learn more about this technology and how it can benefit your business, sign up for a free consultation with our experts.

Customer retention is the key

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What are the most relevant factors to consider?

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Don’t overspend on growth marketing without good retention rates

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What’s the ideal customer retention rate?

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Next steps to increase your customer retention

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